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43 » VISIT US ONLINE @ DSNEWS.COM McMANSIONS SURGE FOR FIRST TIME SINCE CRISIS Back in the mid-2000s, McMansions, or homes that were larger than 3,000 square feet, helped fuel the housing bubble as people started building bigger and better homes. Coupled with subprime mortgages, banks couldn't keep up when people stopped paying their mortgages, and the market collapsed. Now, according to Newsweek, the popularity of McMansions is surging once more, and the median price of McMansions is approaching what it once was in 2007. According to information put out by Zillow, the median McMansion price in the year 2000 was $330,500. at number climbed to $519,500 before the collapse in 2007. Since then, home prices have rebounded to a median $482,300 as of May 2017. Compare those figures to the median value of all other homes in the year 2000—$119,800—and the May 2017 figure of $199,200, which is at an all-time high. McMansions have a contagious effect on neighborhoods, according to a report put out by Clement Bellet of the Center for Economic Performance. Once a McMansion moves into a neighborhood, it fuels more people to upgrade, Bellet says. e article estimates that 794,000 large homes were built in May. "I further show that when bigger houses get built closer to smaller houses, house satisfaction is lower among the smaller households," Bellet said. "e effect is concentrated in suburbs where size inequality is high but segregation is minimal due to geographical constraints on developable land. us, the relative size effect depends on economic segregation within counties, defined by the distance separating superstar houses from houses below median size." Will the rise in popularity create another housing market crash? e data could be pointing toward that. If the Fed doesn't slow down expansion by increasing interest rates, a collapse could be imminent. OPTIMISM UP IN HOUSING MARKET As summer heats up, so does the housing market. According to the most recent Fannie Mae Home Purchase Sentiment Index (HPSI), more and more Americans feel now is a good time to buy. June's index saw a 2.1 jump from May, ending up at 88.3 percent—matching the all-time high seen in February. According to Fannie Mae Chief Economist Doug Duncan, the HPSI also reflects a growing sellers' market. Month over month, the net percentage of respondents who indicated it's a good time to sell rose to 39 percent, a new high and 7 percent increase from May. However, there are still some clouds on the horizon. "While consumer optimism on this metric is as high as we've seen in the survey's seven- year history, it's worth noting that this record is relative to the fairly tight standards in place post-crisis when we started collecting National Housing Survey data," Duncan said. "Nevertheless, in the face of very tight housing supply, easing credit standards may fail to have the desired effect and could have the unintended consequence of fueling further house price increases." ough Americans seem to feel optimistically about the housing market, they aren't as confident in other sectors, according to Fannie Mae. e net share of respondents who reported they weren't concerned about losing their jobs dropped by 5 percent to 66 percent, while those who reported their household income is higher than a year ago fell 1 percent to 17 percent. The percentage of total delinquencies in the U.S. in June. Source: Black Knight's June First Look Mortgage Data Report STAT INSIGHT 3.8%

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